BRIEFING - The growth mindset - Sizing up the Government’s growth agenda

From its prominent position in Labour’s election manifesto, to the Chancellor’s post-election pledge to ‘fix the foundations’ of the UK’s economy, growth is the new Government’s answer to Britain’s twin economic challenges of stagnating living standards and tight public finances.1 At the heart of this approach is a pledge to make the UK the fastest-growing country in the G7.2 But achieving this wi. [...] The average error of 5-year ahead GDP growth in IMF forecasts of is around Resolution Foundation The growth mindset | Sizing up the Government’s growth agenda 12 2 percentage points, and forecasts are generally biased upwards.9 Recent economic history – the 2008 global financial crisis, the global slowdown in growth that followed it, the pandemic and the 2022 energy price shock – shows that the UK. [...] Although Government housing targets are set at local authority level, we analyse the impacts of the Government’s targets through travel to work areas (TTWAs) 38 which better reflect the flow of economic activity in the UK.39 Under the previous Government, the rate of house building (relative to the size of the local housing stock) was relatively even across high and low productivity areas, with on. [...] The decline in goods trade of 10.7 per cent in the year to Q2 2024 since 2019, compared to 4.6 per cent higher on average for the rest of the G7, highlights the tangible economic costs of leaving the Customs Union and the single market.48 In contrast to the previous Government’s focus on non-EU trade agreements, Labour’s manifesto outlined a series of targeted commitments aimed at enhancing trade. [...] Here the impact could be very large – a ‘UK Protocol’ (combining joining the EU’s customs territory with the single market for goods) could reverse much of the hit to the level of GDP from Brexit, restoring 2 percent of GDP which over, say, a decade, by around 0.2 percentage points – enough on its own to achieve two-fifths of the growth needed to reach the top of the G7 growth league.59 Policy sta.